Canadian Retailer Year In Review

Transcription

May 3, 2015
Canadian Retailer
Year In Review
Executive Summary
Disclaimer:
This report is intended as a summary of the strategic statements made in recent annual reports of
publicly traded retailers operating in Canada. The service is only designed to provide an executive
summary of these documents. Full details are available in the individual annual reports which can be
sourced from the respective companies.
Comments should not be construed as either positive or negative endorsements, nor do they constitute
financial advice. Consult a licensed financial professional before making any financial investment.
what you will find:
Field Agent Canada keeps close tabs on developments in the Canadian
retail industry. We have reviewed the 2014/15 annual reports for most
publicly-held retailers operating in Canada and this report provides the key
highlights that give you the info you need in an easily digestible format.
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Canadian Based Retailers
2014 Highlights
• On March 28, 2014, acquired all issued and outstanding shares of Shopper Drug
Key Figures Fiscal 2014
Sales (Millions $CDN)
Operating Income
Net Earnings Per Share
•
2014
% Change
•
$42,611
+31.6%
•
$662
-49.9%
$0.14
-93.7%
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Share Price ($CDN)
# of Stores
Employees
$62.66
615 Corporate
527 Franchised
138,000
Year End January 3, 2015
+49.9%
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Mart for $12,273 million. Paid $6600 million in cash and issued 119.5 million
common shares of the company.
Loblaw experienced $101 million of net synergies from the purchase of Shoppers
Drug Mart mainly due to improved cost of goods sold and purchasing efficiencies.
Completed the conversion of all grocery locations and distribution centres to new IT
systems. Updated all stores to a perpetual inventory management system.
Restructured fee arrangements with the franchisees of certain franchise banners.
Recorded $46 million in restructuring and reorganization costs mainly due to the
reduction of corporate and store-support positions, the departure of certain
executives and the realignment of certain store functions.
Revenue increased by $10,240 million compared to 2013, primarily due to the
purchase of Shoppers Drug Mart and the impact of the 53rd week in 2014.
Same store sales increased 2.0%.
Sales: Shoppers Drug Mart ($9,050); Excluding Shoppers Drug Mart ($32,681).
Sales growth: Food (moderate), Drugs (flat), Gas Bar (modest), General Merchandise
(flat), Apparel (modest).
Since the acquisition, Shoppers Drug Mart opened 17 new drug stores and closed
24 drug stores.
Sold 36 investment properties to Choice Properties for $410 million. Choice
Properties acquired different interests and at year end, Loblaw owned 82.9% of
Choice Properties.
2015 Priorities
• Expect to achieve annualized synergies of $300 million in the third full year following
the close of the acquisition of Shoppers Drug Mart.
• Expect to invest approximately $1,200 million in capital investments in 2015.
Approximately 22% expected to be invested in IT and supply chain projects, 57%
on retail operations, 14% on Choice Properties‘ development projects and 7% on
other infrastructure projects.
Source: Loblaw Companies Annual Report 2014
2014 Highlights
• Merchandise & Service Revenues: Canada (26.2%), US (60.6%), Europe (13.2%).
• Fuel Revenues: Canada (10.6%), US (56.9%), Europe (32.4%).
• Same-store merchandise revenues increased by 3.8% in the US, 1.9% in Canada
Sales (Millions $USD)
Operating Income
2014
% Change
$37,957
+6.8%
$1,034
$1.44
Share Price ($CDN)
$30.34
# of Stores
8,499
Employees
78,000
+23.2%
+39.8%
-48.7%
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Year End April 27, 2014
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and 1.6% in Europe.
Operate 6,241 convenience stores in North America and 2,258 stores across
Europe. Own licensing agreements under an additional 4,600 stores under the
Circle K banner in 12 other countries worldwide (China, Guam, Honduras, Hong
Kong, Indonesia, Japan, Macau, Malaysia, Mexico, Philippines, Vietnam and
United Arab Emirates).
Acquired 15 company operated stores operating in South Carolina, from Garvin Oil
Company.
Acquired 10 additional company-operated stores.
Completed construction of 25 new stores and raised and rebuilt 14 stores.
At year-end, 14 stores were under construction.
Formed new corporation Circle K Asia LLC along with a third party. Each party
holds a 50% interest. Purchased a portion of Circle K’s International franchise
agreements as well as a master franchise in Asia.
In Feb., Mexican operator Circulo K reached an agreement to acquire 878 stores in
Mexico.
In May, completed through Circle K Asia, a Circle K Master license agreement in
India with RJ Corp for 25 years. This agreement addresses Deli, Mumbai, Goa,
Gujarat, Bangalore and Madras regions in India.
In March, the board of directors approved a three-for-one share split of all issued
and outstanding Class “A” and “B” shares.
2015 Priorities
• Expect to pursue investments with caution to improve network and build additional
stores.
• Intend to keep an ongoing focus on sales, supply terms and operating expenses
and keep an eye on new growth opportunities.
• Continue to focus on Statoil Fuel & Retail’s synergies and reduce debt.
• Focus on the sale of fresh products and innovation.
Source: Couche Tard Annual Report 2014
2014 Highlights
• In 2013, purchased Canada Safeway for $5.8B (including real estate valued at
•
2014
% Change
$20,993
+20.6%
•
Operating Income
$328.5
-42.3%
•
$2.94
-47.4%
•
Share Price ($CDN)
$68.73
+0.2%
# of Stores
Employees
Year End May 3, 2014
+1,500 est.
125,000
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$1.8B). This was the largest acquisition in the company’s history, solidifying its
position as second largest food retailer in Canada. Management estimates annual
synergies of approximately $200M and expects synergies to be achieved over a 36
month period.
Sobeys opened, acquired or relocated 94 corporate and franchised stores,
acquired 223 stores in the Canada Safeway acquisition, expanded 4 stores,
rebannered/redeveloped 11 stores, divested 19 stores and closed 45 stores.
Total locations: Western Canada (409), Ontario (335), Quebec (655), Atlantic Canada
(421).
Seven Major Banners: Sobeys, Sobeys extra, IGA extra, Thrifty Foods, IGA,
Foodland, FreshCo and Safeway.
Seventy Safeway locations were sold to Crombie REIT for $991 million, enabling to
receive investment-grade status.
Secured a leading market share position in Western Canada, including the fastgrowing Alberta market.
Divested Empire Theatres for pretax gain of $125.2 million.
Consolidated Safeway and Empire senior management teams.
Introduced the Better Food For All movement - the next generation of food-focused
fresh driven, full service banners. Eight new concept stores that reflect this
movement have been opened.
Completed SAP rollout in Quebec and at Thrifty Foods.
Opened a second automated distribution centre.
Same-store sales remained consistent to previous year.
2015 Priorities
• Plan to close approximately 50 underperforming stores. Sixty percent of these
stores are located in Western Canada.
• Continue to invest in infrastructure and productivity improvements.
• Continue to build a strong management team while improving the customers’ in
store experience
• Focus on workforce management and in-store programs
Empire 2014 Annual Report
2014 Highlights
• Record sales of $12,011 million up 5.4% and net earnings reached $489.3 million, up
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2014
% Change
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$11,590
+1.7%
•
Operating Income
$781.5
+2.1%
•
$5.11
-29.7%
Share Price ($CDN)
$73.87
+14.1%
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# of Stores
588 - Food
268 - Drug
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Employees
65,000
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Year End Sept 27, 2014
24.6% over last year.
Acquired a 75% interest in Boulangerie Premier Moisson, the famous Quebec bakery
that operates in the Montreal region.
Acquired two supermarkets in Ontario, which were immediately converted to the
Food Basics banner.
Added 350 new products, including 91 Irresistibles Life Smart products.
Opened six new stores and carried out major renovations and expansions of 25
stores.
Opened a new Adonis store in Scarborough, Ontario, the eighth in the chain and the
second in Ontario.
Opened 13 Brunet Target affiliated pharmacies.
Acquired two supermarkets in Ontario that were converted to the Food Basics
banner.
Expanded My Healthy Plate with Metro program, adding smile tags in over 60
product categories and bringing the total of smile-tagged products to over 3,000.
Repurchased over 7 million shares and approved new dividend policy of an annual
dividend representing 20%-30% of the preceding fiscal year’s adjusted net earnings.
Consolidated Quebec produce and dairy distribution operations at the new
distribution centre in Laval, Quebec.
2015 Priorities
• Will invest $300 million in the network of stores.
• Continue to execute strategy based on a differentiated customer experience in each
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Source: Metro Inc. Annual Report 2014
store format.
Continue to leverage loyalty programs and develop the digital ecosystem.
Continue investments in the Super C and Food Basics discount stores and plan to
open a few new stores.
New Adonis stores will be added to the current eight stores, two of which are located
in Ontario.
The pharmacy sector will continue its growth by expanding, renovating or opening
new locations.
2014 Highlights
• Stores: Cdn Tire (493), Mark’s (383), FGL (436), Petroleum (297), PartSource (91).
• Launched the FRANK private-label brand and the CANVAS home decor line, re-
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2014
% Change
$12,463
+5.7%
•
Operating Income
$878
+11.9%
•
$7.65
+10.0%
$122.22
+22.4%
Share Price ($CDN)
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# of Stores
1,700
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Employees
85,000
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launched the MasterCraft MAXIMUM line for tools and acquired the Woods brand
for camping and outdoor equipment.
Same-store sales growth: Canadian Tire (2.4%), FGL Sports (6.9%), Mark’s (3.1%),
Petroleum (2.7%).
Completed the national rollout of loyalty program “My Canadian Tire Money,” which
introduced electronic money in addition to paper money.
Sold a 20% interest in the financial services business to Scotiabank for net
proceeds of $476.8 million.
Launched a co-marketing program that extends benefits of SCENE program,
enabling members to earn and redeem points for products at over 180 Sport Chek
locations.
Closed PHL’s warehouse facility in Laval, Quebec and integrated PHL’s supply chain
operations with FGL Sports.
CT REIT completed 13 property acquisitions, 6 intensifications, 2 development land
acquisitions and 2 developments.
Opened a new data centre in Winnipeg and upgraded the computer facility in
Brampton.
Partnered with Communitech to give the company direct access to talent and
technologies for the development of advanced digital experiences for customers.
2015 Priorities
• In 2015, opened a new Calgary DC servicing Mark’s and FGL Sports.
• Continue to focus on designing marketing campaign for the 2016 Summer Olympic
Games in Brazil.
• Continue working towards financial targets.
• Continue to focus on the “Tested for Life in Canada TM” campaign.
• Focus on driving growth in the four businesses: Canadian Tire, FGL Sports, Mark’s
and Financial Services.
Source: Canadian Tire Corporation Annual Report 2014
2014 Highlights
• Increase of 1.2% in same-store sales across the network. First year of same-store
•
Operating Income
•
2014
% Change
$4,096
-2.3%
$121
+448%
Net Earnings Per Share*
$0.56
+141.8%
Share Price ($CDN)
$13.86
+5.0%
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# of Stores
+500
Employees
24,000
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sales growth since 2006.
Same-store sales grew to 1.1% in the retail segment and 1.7% in the distribution
segment.
Marked improvement in profitability due to the combined impact of organic growth
and the decrease in selling, general & administrative expenses.
Repurchased 7.3 million common shares for $94.2 million.
Invested $61.2 million in property, plant & equipment.
Three business priorities: growing sales, completing the transformation of the RenoDepot banner and developing and implementing new positioning strategies for all
banners across Canada.
TOTEM now operates under the RONA banner and Reno-Depot.
The transformation of the Reno-Depot banner resulted in early positive signs and
sales have been growing steadily.
Generated free cash flows of $99.9 million and a solid financial position.
Improved the merchandising strategy, especially in certain high-demand
convenience products for contractors and professionals.
Started the company’s expansion plan.
Introduced new products and categories.
Year End December 28, 2014
2015 Priorities
• Expand the store network in a disciplined manner and increase the return on capital
invested.
• Further maximize the leverage from organic-growth initiatives, while maintaining
strict control over operating costs.
• In spring 2015, Rona will open two new stores under the Reno-Depot concept in
existing buildings in Aurora, Ontario and Calgary, Alberta to assess the impact.
• Will continue to expand in markets where the company must protect and strengthen
market share or where there is strong growth potential.
Source: RONA Feb. 7, 2015 press release
2014 Highlights
• In Fiscal 2013, opened 16 PJC franchised stores, of which 6 were relocated stores
2014
% Change
$2,459
-0.4%
Operating Income
$302
+3.7%
$2.12
-17.5%
Share Price ($CDN)
$20.94
+32.7%
# of Stores
413
Employees
19,481
Year End March 1, 2014
and 6 were acquired. Twelve stores were renovated or expanded.
• Opened 14 PJC franchised stores; 6 were relocations.
• Same store sales decreased 0.1%.
• PJC franchised drugstores filled 86.2 million prescriptions.
• 14 PJC franchised stores were significantly renovated or expanded.
• Enhanced internet site to offer more comprehensive information and optimize online
presence. Added hundreds of products to the online boutique.
• A holiday season virtual store was created in a Metro station in a suburb of Montreal,
Quebec.
• Introduced three new pharmacy information kits: new moms, migraines and food
allergies.
• Opened 5 new “Boutiques Passion Beaute” for a total of 132 boutiques.
• Remained the leading retail digital photo destination in Quebec.
• New photo services offered include magnet products, puzzles and studio portfolio
print packages.
• Introduced 200 new private brands and exclusive products.
• Proportion of generic drugs reached 66.8% of prescriptions.
2015 Priorities
• Plan to introduce several new private and exclusive products and will add to the
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Source: The Jean Coutu Group Annual Report 2014
current line of products.
Continue to promote the PJC brand through advertising, promotions and
sponsorships and strive to increase customer loyalty in the AIR MILES REWARDS
program.
Continue expansion and renovation of PJC network.
Capital expenditures and in banner development costs projected at approximately
$137.4 million.
Plan to open or relocate 14 stores and complete 32 store renovation and expansion
projects.
Plans to consolidate operations in Longueuil, including the headquarters and
distribution center, in Varennes, on the south shore of Montreal.
2014 Highlights
• Closed 5 full-line department stores, 1 home store, 3 Appliance & Mattress stores, 34
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Operating Income
•
2014
% Change
$3,425
-14.2%
$(407.3)
-$3.32
-116.9%
-175.8%
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Share Price ($CDN)
$11.90
# of Stores
172 Corporate
201 Dealer
Employees
approx.
19,000
-8.5%
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Hometown stores, 1 travel office and 142 Catalogue merchandise pickup locations.
Sold all shopping centre real estate joint arrangements.
Launched PURE NRG Athletics performance clothing for active women, the Style at
Home collection, new private label for men Logan Hill, a new line of women’s Jessica
Intimates and focused on new Craftsman technologies.
Same store sales decreased by 8.3% overall.
Same store sales: Home & Hardlines (-10.3%), Apparel & Accessories (-6.2%)
Hosted in store fitness lifestyle events in select stores.
Implemented an inventory management program to reduce surpluses and out-ofseason merchandise.
Held special career and recruitment events for Target employees after Target
announced the closing of Canadian stores.
Announced appointment of Ronald D. Boire as President & Chief Executive Officer.
Purchased the Oracle Retail Merchandising System to provide an improved in-stock
position of the company’s most popular items.
Opened a 240,000 square foot small-ticket fulfillment centre in Calgary, Alberta that
provides items for customers in Western Canada who order from the company’s
direct channel.
New recycling partner GreenSpace Waste Solutions began handling the company’s
recycling activities.
Completed the year in a strong financial position with $259 million in cash and no
significant debt.
2015 Priorities
• Will provide a seamless omni-channel retail experience for customers and will invest
in technology to support this strategy.
• Continue to keep pace with emerging trends and innovative delivery of products and
services.
Source: Sears Canada Annual Report 2014
2014 Highlights
• Leading retailer to underserved communities and urban neighbourhood markets in
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2014
% Change
$1,624
+5.2%
Operating Income
$97.5
-2.6%
$1.29
-2.3%
Share Price ($CDN)
$26.56
+4.5%
# of Stores
225
Employees
6,647
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northern Canada, western Canada, rural Alaska, the South Pacific Islands and the
Caribbean.
Sales Mix: Food 78%, General Merchandise 18%, Other 4%.
Food sales increased 6.3% and same store food sales grew by 2.8%.
Canada
• Sales of $1,042 million increased +1.9%.
• Food sales accounted for 73.4% of total sales and increased 2.8%, while same
store food sales increased 1.8%.
• Store Split: Northern (121), Giant Tiger (32), North Mart (6), Quickstop (12)
International
• Food sales accounted for 86.8% of total sales and increased 4.5%, same store
food sales increased 4.7% and general merchandise sales increased 4.0%.
• Store Split: AC Value Centers (27), Quickstop (6), Pacific Alaska Wholesale or
PAW (1), Cost-U-Less (13) and Island Fresh Supermarket (1).
In Canada, converted NorthMart in La Ronge, Saskatchewan to a Giant Tiger,
opened a store under the Price Chopper banner and opened a temporary clearance
centre in Winnipeg, Manitoba.
Acquired a Tim Hortons franchise in Thompson, Manitoba.
Closed an AC Value Center in Kodiak, Alaska.
Identified the Top 40 markets and created a three to four year investment plan.
2015 Priorities
• Net capital expenditures expected to be approximately $65 million with a focus on
major store replacements, store renovations and investments in fixtures, equipment,
staff housing and store-based warehouse expansions.
• Expect to complete 10 to 12 stores under the Top40 Markets Initiative in Northern
Canada.
• Plan to open 3 Giant Tiger stores and complete “New Store Experience” upgrades
in 6 Giant Tiger stores.
Source: North West Company Fund Annual Report 2014
2014 Highlights & History
• Store locations: Ontario (399), Quebec (266), West (215), Atlantic (75).
• Product Mix: Consumables (38%), General Merchandise (48%) & Seasonal (14%).
• Stores carry more than 4,000 year-round SKUs and more than 700 seasonal SKUs.
• Product sourcing is split with 52% sourced from imports & 48% from North America.
2014
% Change
$2,331
+12.9%
Operating Income
$422.6
+19.2%
$2.22
+27.6%
$60.35
-28.2%
Share Price ($CDN)
• Most imports from China, but overall from a total of 25 different countries along with
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# of Stores
955
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Employees
18,000
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Year End February 1, 2015
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North America.
For the top 5 U.S. dollar store chains, there are approximately 12,000 people per
dollar store. For the top 5 Canadian dollar store chains, there are approximately
25,000 people per dollar store.
Top 10 suppliers represent 26% of sales while the Top 25 represent 40% of sales.
Operate 5 warehouses and 1 distribution center in Quebec. Warehouse
approximately 61% of merchandise and distribute 91% of merchandise through the
distribution center.
Largest Competitors: Dollar Tree Canada (210), Dollar Store with More (120), Great
Canadian (95), Buck or Two (49).
Comparable store sales grew 5.7%; 4.2% increase in the average transaction size
and 1.4% increase in the number of transactions.
Opened 81 net new stores (9.3% growth).
During 2014, 67.7% of sales originated from products priced higher than $1.00.
Capital expenditures totaled $84.9 million.
Leased all stores from unaffiliated third parties, except 19 stores which are leased
from entities controlled by Larry Rossy and family.
2015 Priorities
• Continue to open new stores and plan to expand up to 1,400 stores over the next 6-7
years.
• Will undergo further mobile-driven projects.
Source: Dollarama Inc. Fncl Statements, AIF and M,D&A - February 1, 2015
• Leading North American retailer offering a wide selection of branded merchandise in
2014
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% Change
•
$8,169
+56.4%
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Operating Income
$481
+9,520%
$1.31
+200.0%
Share Price ($CDN)
$23.42
+42.2%
# of Stores
331
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Employees
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Canada and the US. Leading banners include Hudson’s Bay, Saks Fifth Avenue,
Lord & Taylor, OFF 5TH and Home Outfitters.
Stores: Hudson’s Bay (90 full line stores and 2 outlet store), Sak’s Fifth Avenue (38
US stores and 5 international licensed stores), Lord & Taylor (50 full-line locations and
4 outlets), OFF 5TH (77 US stores) and Home Outfitters (67 Canadian locations).
Fiscal year capital expenditures ($426m): merchandising ($249m), information
technology ($40m), digital commerce ($26m) and maintenance ($111m).
Announced appointment of Gerald Storch as Chief Executive Officer.
Entered into agreements with Simon Property Group and RioCan Real Estate
Investment Trust to form two joint ventures focused on real estate growth
opportunities.
Announced appointment of Marc Metrick to President, Saks Fifth Avenue.
Consolidated same store sales (including Saks) increased 7.5%.
Same store sales: Department Store Group -DSG- (1.5%), Saks Fifth Avenue (2.1%),
OFF 5TH (15.1%).
Sales growth at DSG was driven by men’s apparel, ladies’ shoes, dress clothes and
outerwear.
Sales growth at Saks Fifth Avenue was driven by menswear and accessories while
OFF 5TH experienced growth across all categories.
Digital commerce sales grew to $900 million.
2015 Priorities
• Intend to invest an incremental $50 million in strategic growth initiatives, including an
accelerated pace of new store openings at OFF FIFTH
• Expect total sales to be between $9.0 and $9.3 billion.
• Capital investments expected to be between $350 million and $400 million and will
include the addition of one Saks Fifth Avenue store and between 12 and 14 OFF 5TH
stores.
Source: Hudson’s Bay 2014 Annual Report January 31, 2015
• Sales decrease was driven by declining book and eReader sales, reduced loyalty
2013
Operating Income
$868
$(30)
•
% Change
-1.3%
-108.2%
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$(1.21)
-811.8%
Share Price ($CDN)
$9.34
-16.0%
# of Stores
Superstores - 95
Small format - 131
Employees
6,200
Year End March 29, 2014
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card sales and the company operating 9 fewer stores than the previous year.
The sales decrease was partially offset by double-digit growth in lifestyle, paper,
and toy sales along with continued growth in online sales.
Book sales decreased mainly due to the huge success of Fifty Shades and Hunger
Games trilogies in the prior year.
Online sales increased By $10.1 million or 11.0%.
Closed the World’s Biggest Bookstore.
Closed two superstores and three small format stores. There were no store
openings.
Launched 37 Indigotech shops inside select superstores to showcase an
expanded offering of electronic products.
Expanded lifestyle and paper offerings.
Subsequent to year-end, launched American Girl specialty boutiques inside select
superstores.
Implemented an integrated planning system to improve the merchandise and
financial planning for all categories.
Systematically organized retail store backrooms to drive retail productivity and
improve merchandise management under the Galileo system.
Comparable store sales decreased (0.9)% in superstores and decreased (5.0)% in
small format stores.
Expanded digital marketing and merchandising capabilities and launched a fivestar rated mobile app
2014 Priorities
• Continues to expand its assortment of toys and games with dedicated toy sections
and expanded toy offerings in all superstores.
• Committed to expanding home, paper merchandise and fashion accessories.
• Focus on continuing to drive end-to-end productivity, including supply chain
projects to improve the flow of merchandise and margin expansion initiatives.
Source: Indigo Books & Music Inc. Annual Report 2014
• 1,600,000 active co-op members are located in 500 communities across Western
•
Operating Income
Share Price ($CDN)
# of Stores
Employees
•
2014
% Change
•
$10,834
+15.0%
•
$656
-22.5%
NA
NA
365
3,000
Year End October 31, 2014
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Canada.
Largest company in Saskatchewan and 45th largest company in the Canada.
Membership consists of 222 member retail co-operatives, two affiliate members and
eight associate members.
Completed 137 new, expansion or upgrade projects - including food stores, home
and agro centres and convenience stores in the last two years.
Completed 74 new or rebuilt cardlocks gas bars and bulk plants in the last two years.
Acquired 14 food stores and 4 gas bars from Sobeys; transferred ownership and
operations to 12 local co-ops and 2 locations transferred to The Grocery People
(TGP).
Workforce has grown 11.4 per cent in the last five years.
Experienced a 30% increase in crop supplies sales over 2013.
Released the Sell To Us guide to help producers and businesses sell to Co-op.
Sold over 1 million pounds of local produce in Co-op stores in Saskatchewan.
The refinery processed 32.8 million barrels of crude.
CRS petroleum sales volume increased by 5.7 percent year over year.
Propane sales increased 19%.
The petroleum fleet delivered 3.3 billion litres of fuel.
Launched Let’s Talk Co-op, an online survey panel designed to engage Co-op
customers and members.
2015 Priorities
• Introduce Labour Management Standards (LMS) to the Home and Building Supplies
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Source: Federated Cooperatives Limited - Annual Report 2014
warehouse in Calgary.
Rollout Director Development Program (DDP) to retail members.
Work to rebuild damaged unit used to manufacture gasoline from propane and
butane.
Complete wastewater improvement project.
Carseland terminal in Alberta expected to be fully operational.
International Retailers with Canadian Operations
2014 Highlights
• Percentage of net sales: US (60%), International (28%) and Sam’s Club (12%).
• Increase in sales due to 3.0% growth in retail sq. ft., positive comparable sales in
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2014
% Change
Sales (Billions $USD)
$482.2
+1.9%
Operating Income
$27.1
+1.0%
$5.07
+3.5%
Share Price ($USD)
$84.98
+13.8%
# of Stores
>11,000
Employees
2,200,000
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the US and higher e-commerce sales across the company.
E-commerce sales positively impacted comparable sales approximately 0.5%.
US: $288.0 billion in sales (+3.1%); 4,516 stores (+313); Percent of Sales (59.8%)
• Comparable store sales increased 0.5% and were impacted by higher traffic
and lower gas prices.
• Percentage of Sales: grocery (56%), entertainment (10%), health & wellness
(11%), hardlines (9%), apparel (7%) and home (7%).
Sam’s: $58.0 billion in sales (+1.4%); 647 stores (+2.4); Percent of Sales (12%)
• Percentage of Sales: grocery & consumables (57%), fuel (23%), home &
apparel (8%), technology, office & entertainment (7%), health & wellness (5%).
• Increase in net sales due to year-over-year growth in retail sq. ft. of 2.5%.
Int’l: $136.2 bln in sales (-0.2%); 6,290 stores (+3.0); Percent of Sales (28.2%)
• Decrease in net sales due $5.3b negative impact of currency fluctuations,
partially offset by year-over-year net growth in retail sq. feet of 2.6% and
higher e-commerce sales in each country.
• The increase in gross profit rate was mainly due changes in the merchandise
mix in a number of the segment’s larger operations.
Canada: 394 Stores (+5).
2015 Priorities
• Plan to add between 26 and 30 million square feet, including a continued
investment in Neighbourhood Markets and a moderation of Supercenter growth in
the US.
• Invest $1.2 billion to $1.5 billion in e-commerce websites and mobile commerce
applications.
• Capital Expenditures: US ($6.6b), International ($4.2b), Sam’s Club ($0.8b), Other
($1.3b).
Source: Wal-Mart 2015 10-K
2014 Highlights
• Net Sales: North America ($55,469), International ($33,519); Germany ($11,919),
Operating Income
Share Price ($USD)
2014
% Change
$88,988
+19.5%
178
-76.1%
-$0.52
-$186.7%
$310.35
-22.2%
# of Stores
n/a
Employees
154,100
Year End December 31, 2014
Japan ($7,912), United Kingdom ($8,341)
• Net Sales: Media (25.3%), Electronics & Other General Merchandise (68.4%),
Other (6.3%).
• No supplier accounted for more than 10% of purchases.
• Total comparable sales increased 20%; North American comparable sales
increased 25%; International comparable sales increased 12%.
• More than 40% of units are sold by more than 2 million third-party sellers
worldwide.
• Customers ordered more than 2 billion units from sellers.
• Jan/15 signed an agreement to acquire a technology company for $350m.
• Manufacture and sell electronic devices, including Kindle e-readers, Fire tablets,
Fire TVs, Echo and Firephones.
• Offer Amazon Prime annual membership program, which includes unlimited free
shipping on millions of items and access to thousands of movies, tv episodes and
books.
Marketplace:
• Hosted merchants from more than 100 different countries and helped them
connect with customers in 185 different nations.
• Almost 1/5 of overall third party sales occur outside the sellers’ home countries
and merchants’ cross border sales nearly doubled last year.
• Started to consolidate cross-border shipments for sellers and help them obtain
ocean shipping from Asia to Europe and North America at preferential, bulk rates.
• Offer more selection than any other e-commerce site in India; more than 20 million
products offered from over 21,000 sellers.
2015 Priorities
• Focus on customers.
• Continue to make bold, long term investment decisions.
Source: Amazon 2014 Annual Report
2014 Highlights
• On January 14, 2015, the board of directors approved a plan to discontinue
•
2014
% Change
•
$72,618
+1.9%
•
Operating Income
$4,535
-12.3%
•
-$2.58
-183.2%
•
Share Price ($USD)
$73.61
+30.0%
•
# of Stores*
1,790
•
•
Employees
*Includes U.S. stores only
347,000
•
•
operating stores in Canada.
On January 15, 2015, announced exit from the Canadian market and Target
Canada Co. and certain other wholly owned subsidiaries of Target filed for
protection in Canada under the Companies’ Creditors Arrangement Act (CCAA)
with the Ontario Superior Court of Justice in Toronto.
Canadian subsidiaries have started to liquidate and stores in Canada are expected
to remain open during liquidation.
Recorded a pre-tax impairment loss relating to Canadian discontinued operations
of $5.1 billion.
Sales by Category: household essentials (25%), hardlines (18%), apparel and
accessories (19%), food and pet supplies (21%) and home furnishings and decor
(17%).
Percentage of sales paid using Target credit cards (9.7%), Target debit cards
(11.2%) and total REDcard penetration (20.9%).
Network includes 38 distribution centres.
Comparable sales grew 1.3%; digital channel sales growth of more than 30%
contributed 0.7 percentage points to comparable sales growth.
Recorded a data breach related expense of $145 million.
Number of stores: Expanded Food Assortment (1,292),SuperTarget (249), Target
General Merchandise (240), CityTarget (8), TargetExpress (1).
Opened 16 stores and closed 19 stores in the U.S.
2015 Priorities
• In March 2015, announced a headquarters workforce reduction. Expect to record
$100 million of severance and other charges within SG&A in Q1 2015.
• Will operate as a single segment that includes all continuing operations, designed
to enable guests to purchase products seamlessly in stores, online or through
mobile devices.
• Convert existing co-branded REDcards to MasterCard co-branded chip-and-PIN
cards.
• Expect $2.1 billion in capital expenditures.
Source: Target Stores Inc. 2014 10-K
2014 Highlights
• Consolidated comparable store sales increased 5.3%. US comparable store sales
•
•
•
2014
% Change
$83,176
+5.5%
Operating Income
$10,469
+14.2%
•
•
•
$4.74
+25.4%
•
Share Price ($USD)
$104.42
# of Stores
2,269
Employees
371,000
Year End February 1, 2015
+35.9%
•
•
•
•
•
•
•
were up 6.1%.
Digital channels accounted for over $1 billion of total growth.
Positive sales in all 3 US divisions, Canada and Mexico.
Achieved highest net earnings in company history and returned over $9.5 billion to
shareholders in dividends and share repurchases.
Acquired HD Supply Hardware Solutions, a leading supplier of fasteners and
builders hardware to retailers in the U.S.
Sales By Category: Plumbing, electrical & kitchen (24%); Hardware &
seasonal(23%), Building materials, lumber and millwork (20%), Painting & flooring
(16%).
Canadian store count (181): AB (27), BC (26), MN (6), NB (3), NF (1), NS(4), ON(87),
PE (1), QE(22), SK (4).
Opened 1 new store in Canada and 6 new stores in Mexico; 12.9% of stores
located in Canada or Mexico.
Operate 18 mechanized Rapid Deployment Centers (RDCs) in the U.S. and opened
the first RDC in Canada in early 2014.
Opened two new direct fulfillment centers to support the online channel.
Currently in pilot with Buy Online, Deliver From Store (BODFS), allowing products to
be delivered to the job-site or home within a specified delivery time frame.
Team Depot completed 1,200 projects to improve veterans’ homes across 882
cities.
Confirmed payment data systems were breached.
Provided web-enabled FIRST phones to help associates assist with the online
experience when they encounter customers in the aisles.
Introduced a new mobile app designed with an enhanced in-store map and live chat
feature.
2015 Priorities
• Plan to open a second RDC in Canada in the second half of 2015.
• Plan to open a third direct fulfillment center.
• Announced an $18b share repurchase program.
Source: The Home Depot Annual Report 2014
2014 Highlights
• Comparable sales increased 6% due to increases in both shopping frequency and
Operating Income
•
2014
% Change
$110,212
+7.1%
$3,220
+5.5%
•
•
•
•
•
Share Price ($USD)
# of Warehouses
Employees
Year End August 31, 2014
$4.69
+0.2%
$121.08
+8.2%
663
195,000
•
•
•
•
•
•
•
the average amount spent by members.
US and Canadian operations comprised 88% and 84% of consolidated net sales and
operating income.
Operate 648 membership warehouses worldwide with 87 in Canada.
Goldstar: 29.0 million; Business 6.6 million.
Renewals were maintained at record levels of 90% in the U.S. and Canada and 86%
worldwide.
Business split by category: Sundries 22%, Hardlines 16%, Food 21%, Softlines 11%,
Fresh Food 13%, Ancillaries 17%.
Opened 3 warehouses in Canada in West Edmonton, Oshawa (Toronto) and
Drummondville (Montreal).
Opened 26 new warehouses in 7 countries.
414 fuel stations in the US and Canada increased sales and profits despite a volatile
gasoline market.
Net income increased 19% to more than $2 billion.
Launched the United Kingdom website and launched the Mexico website just after
year-end.
Costco Optical and Hearing Aid Centers increased profitability at a higher rate than
the rate of sales increase.
Expanded private label Kirkland Signature items and offered new, upscale brand
name products.
Net sales for online businesses were approximately 3% of consolidated net sales.
2015 Priorities
• Expansion plans of 30-36 new warehouse openings including 16 in the US, 4 in
Australia, 2 in each of Canada, Korea and Japan and 1 in Mexico.
• Expect to invest $2.4 billion in capex.
Source: Costco Annual Report 2014
2014 Highlights
• Comparable store sales increase of 4.3%.
• Top sales: Kitchen & Appliances (14%), Lumber & Building (12%), Tools & Hardware
•
•
2014
% Change
•
$56,223
+5.3%
•
•
Operating Income
$4,276
+16.4%
$2.71
+26.6%
Share Price ($USD)
$67.76
+45.7%
# of Stores
1,840
•
Employees
265,000
•
•
•
•
•
(11%), Fashion (10%), Rough Plumbing & Electrical (9%) and Lawn & Garden (8%).
Source products from over 7,000 vendors worldwide.
Own and operate 15 regional distribution centers, coastal holding facilities, transload
facilities, and flatbed distribution centers.
Own 86% of total stores.
Store Count: US (1,793), Canada (37), Mexico (10).
Contributed $28 million to schools and community organizations in the U.S., Canada
and Mexico.
Rolled out the Outdoor Living Experience to the majority of stores in advance of the
2014 spring selling season.
Estimate size of U.S. home improvement market at $690b in 2014; $520b in product
sales and $170b in installed labor sales.
Installed sales, including both product and labor accounted for approximately 8% of
total sales.
Purchases made on Lowes.com: 60% are picked up in-store, 10% are delivered from
a store, and 30% are parcel shipped.
Online sales accounted for approximately 2.5% of total sales.
Focused on Three Priorities: enhanced Sales & Operations Planning process, building
on customer experience design capabilities and improving relevance with the Pro
customer.
2015 Priorities
• Focus on capitalizing on market opportunities and driving profitability within an
Source: Lowe’s Annual Report 2014
improving economy.
• Continue to differentiate through better customer experiences and improve the
product and service offering for the Pro customer.
• Continue to invest in omni-channel capabilities to ensure the company is convenient
and easy to do business with.
• Improve productivity and profitability in areas like store payroll and achieve cost
savings.
2014 Highlights
• In March 2015, announced decision to consolidate Future Shop and Best Buy
2014
% Change
$40,339
-0.7%
Operating Income
$1,450
+26.7%
$3.53
+126.3%
Share Price ($USD)
$35.20
+49.5%
# of Stores
+1,700
Employees
125,000
stores and websites in Canada under the Best Buy brand. This resulted in
permanently closing 66 Future Shop stores and converting 65 Future Shop stores to
the Best Buy brand.
• Online sales have grown to 9.8% of domestic revenue and online revenue was $3.5
billion.
• Comparable online sales growth of 16.7% due to improved availability, higher
average order value and increased traffic.
• Domestic segment revenue comparable sales grew 1.0%.
• Domestic Revenue Mix: Consumer Electronics (31%), Computing & Mobile Phones
(47%), Entertainment (9%), Appliances (7%) Services (5%), Other (1%).
• Invested $551 million in property & equipment, mainly upgrading IT systems and
capabilities, and store-related projects.
• Five suppliers (Apple, Samsung, Sony, Hewlett-Packard & LG) account for 45% of
purchases.
• Completed the sale of the 50% ownership interest in Best Buy Europe to CPW and
sold mindSHIFT to Ricoh America Corporation.
• Entered into an agreement to sell the Five Star business.
Canadian Operations Overview
• End of F2015 Future Shop store count: AB. (17), B.C. (22), MN (4), NB (3), NF (1),
NS (6), ON (52), PE (1), QU (25), SK (2).
• Total stores at end of F2015: Future Shop (133), Best Buy (71), Best Buy Mobile
stand-alone (56).
• Distribution centres are located in Brampton and Bolton, Ontario and Vancouver,
British Columbia.
2015 Priorities
• Investments up to $160 million over the next 12-24 months. These investments will
Source: Best Buy 2015 10-K
be made in Best Buy stores and Bestbuy.ca to build a leading multi-channel
customer experience.
• Focus on driving comparable sales and improving operating margins.
• Will launch phase two of the cost reduction and gross profit optimization program
with a target of approximately $400m in annualized savings over 3 years.
2014 Highlights
• Announced plan to acquire Office Depot for $6.3 billion. The deal is made up of
Operating Income
•
2014
% Change
$22,492
-2.7%
$310
-73.7%
•
•
•
$0.21
-77.9%
Share Price ($USD)
$17.05
+29.6%
# of Stores
1,963
Employees
83,000
•
•
•
•
•
•
•
•
$4.1 billion in cash and approximately 124.4 million shares of Staples common
stock.
by Category: core office supplies (25.6%), services (8.6%), ink & toner(20.0%),
business technology (14.3%), paper (9.2%), facilities & breakroom (10.0%),
computers & mobility (6.3%) and office furniture (6.0%).
Sales by Segment: United States ($16,022), Canada ($2,697) and International
($3,773).
North American Stores & Online sales decreased 5.9%, driven by a 4.0% decline
in comparable store sales; North American Commercial sales increased 2.8% and
International Operations sales decreased 4.9%.
Operates 315 stores and 14 distribution centers across Canada.
Store Count: Canada (315), United States (1,364), International (284).
Opened 11 new stores and closed 197 stores; downsized and relocated 23 stores
in North America to the 12,000 square foot format.
Adopted a policy requiring an Independent Chairman of the Board.
Added more than 100 category specialists, which supported double digit sales
growth in the $3.4 billion beyond office supply business in North American
Contract.
Invested heavily in e-commerce capabilities, talent and business customer
acquisition in staples.com, which drive 8% local currency sales growth.
Expanded assortment on Staples.com from 100,000 products to well over
1,000,000 products over the last two years.
Acquired PNI Digital Media, a copy and print software company.
Launched Buy Online, Pickup in Store.
2015 Priorities
• Continue plan to close at least 225 retail stores in North America by the end of
2015.
• Conduct cost savings plan to generate annualized pre-tax savings of
approximately $500 million by the end of 2015.
Source: Staples 2014 10-K
2014 Highlights
• In Jul/14, announced intention to purchase Family Dollar.
• In Jan/15, Family Dollar shareholders approved Dollar Tree’s proposed acquisition
Operating Income
Share Price ($USD)
•
2014
% Change
$8,602
+9.7%
$1,040
CA$2.91
$71.10
+7.2%
6.2%
+40.7%
•
•
•
•
•
•
•
•
# of Stores
5,367
Employees
90,000
•
•
of Family Dollar stores; Will become one of the largest retailers in North America
with approximately 13,000 stores.
Combined Store Count: Dollar Tree (5,300), Family Dollar (8,100).
Merchandise Mix: Consumable (49.3%), Variety (46.4%), Seasonal (4.3%).
Operate 210 stores throughout Canada: Alberta (34), British Columbia (53),
Manitoba (11), Ontario (102), Saskatchewan (10).
Opened 391 stores, expanded 72 stores and closed 16 stores.
Comparable store net sales increased by 4.3%, due to a 3.4% increase in the
number of transactions and a 0.9% increase in average ticket.
Debit and credit card penetration continued to increase.
Accepted food stamps in approximately 5,000 qualified stores.
Item purchases include basic, seasonal, closeouts and promotional merchandise.
Approximately 59%-61% is purchased domestically and 39%-41% is imported.
At any point, carry 6,800 items in-store and at y/e, approximately 35% of items are
automatically replenished. Remaining items are ordered on a weekly basis.
Added freezers and coolers to 460 additional stores, bringing the total freezer and
cooler store count to 3,620 stores.
In Jan/15, completed a 270,000 square foot expansion of the distribution center in
Joliet, Illinois.
2015 Priorities
• Plan to add freezers and coolers in 320 more stores.
• Plan to open Dollar Tree stores that are approximately 8,000 - 10,000 selling
square feet.
• Plan to continue the store expansion program.
• No agreement has been reached with the Federal Trade Commission regarding
the Family Dollar acquisition, but Dollar Tree expects to divest no more than 300
stores.
• Estimated capital expenditure expected to be between $465 - $475 million.
Source: Dollar Tree 2014 10-K
2014 Highlights
• Largest retailer of natural and organic foods and the 7th largest public food retailer
•
Operating Income
•
2014
% Change
$14,194
+9.9%
$934
$1.57
+5.8%
+6.1%
•
•
•
•
•
•
•
Share Price ($USD)
$37.67
-35.4%
•
# of Stores
399
Employees
87,200
Year End September 28, 2014
•
•
•
overall.
The first national “Certified Organic” grocer and positioned as America’s healthiest
grocery store.
Operates 9 stores in Canada.
Opened a record 38 new stores including four acquired stores.
Comparable store sales increased 4.3%.
Approximately 30% of our sales, outside of prepared foods and bakery, were
organic
Average weekly sales per store were a record $722,000.
Repurchased 13.9 million shares of common stock.
Percent of Sales by Product Category: prepared foods & bakery (19.2%), other
perishables (47.6%), non-perishables (33.2%).
Exclusive brands accounted for approximately 13% of total retail sales and 18% of
non-perishable sales.
The 365 Everyday Value brand accounts for approximately half of exclusive brand
items.
Several stores piloted the Health Starts Here “Good, Better, Best” rating system.
Nearly 500 products carry the Whole Trade Guarantee Seal.
Approximately 24% of the produce sold came from local farms.
2015 Priorities
• Goal of sales growth over 9.0% and square footage growth of 9%-10% based on
38 to 42 new stores
• Continue the value strategy and invest in technology, marketing, and new and
existing stores.
• Seven former Dominick’s locations will be re-opened evenly throughout the year as
Whole Foods.
• Long term expected to have 1,200 markets in the U.S. Will expand mainly through
new store openings.
Source: Whole Foods Annual Report 2014
© Field Agent, Inc. 2013

Canadian Retailer Year In Review

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